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Next Gen Operators Look Ahead

Since the operators and industry vendors known as the LCT Fast40 started last year, they have applied their think tank ideas to business plans. The 40-and-under leaders are part of a flexible, techno-centric, social media generation spurring use of new technologies and experimenting with dynamic business models as the very nature of client demand and preferences shifts.

The LCT Fast40 officially launched in June 2013 at the LCT Leadership Summit in Miami Beach, and since then regular panels at LCT events have brought together chauffeured industry professionals of all ages, including operators, software experts, finance specialists and insurance agents. Common topics revolve around industry trends and strategies. Participating peers connect over ideas and advice. In the lead up to LCT-NLA Show East this month, LCT interviewed several Fast40 members about key industry challenges and operational approaches heading into 2015.

Q: What are the most important things limo companies can do to stay competitive with TNCs such as Uber and Lyft?

A: Uber has changed the dynamics in our industry. We have never worked with Uber and we are not planning to work with them. The limousine companies should focus on lowering response times for last-minute reservations. We are a service company. We know what our clients want and we do genuinely care about our customers’ well-being. Problems may occur, but how you deal with them says more about the company’s desire to improve service. Uber has disappointed many people in that sense.

Q: What generational differences do you observe and how do they affect the way businesses are managed?

A: As a younger operator, it is easier to adapt to a changing environment. We follow the technology closely and try to adapt to changes immediately. On the other side, we lack the experience and wisdom of an older operator.

Q: What is your biggest cost of doing business and what strategies do you use to minimize them?

A: Being a company based in San Diego, one of our major costs is gas prices. We are one of the most expensive cities to buy gas in the nation. To minimize costs, after the Lincoln Town Cars, we are converting our fleet to Chrysler 300s. We have purchased a Mercedes Sprinter diesel and we will be investing in diesel vehicles for the future. We are also using fleet gas cards for simplicity and convenience.

Q: What vehicle brands or models do you think have potential for growth in the industry?

A: I love the new Chrysler 300. It looks sleek, runs great, and is fuel efficient. We have been using them and most of our clients love the vehicle.

A: Employees. But we pay a premium for top-notch people. In whatever field they’re doing, be it chauffeur, receptionist, or marketer, we’re paying more than fair market value but getting our money’s worth through increased revenue. Things are getting done properly, and in this day and age, that is rare. I’d rather invest more, because in the end, it will pay dividends to my employees and my customer.

Q: What topics would you liked to see talked about among the LCT Fast40?

A: With everybody saying Uber is more competitive, I would like to see the group discuss the different avenues or revenue streams in the industry that Uber can’t touch, like meetings and events. And we should talk about

Uber’s tier system of ranking drivers, because it brings up the question of whether Uber will take away top-notch drivers and go after high-end transportation, which they haven’t been able to. Uber hasn’t really touched my industry; it’s McDonalds vs. the steak house right now, but if they have great chauffeurs, will this business model allow them to break into my industry, or my part of the industry?

Q: What is a noticeable trend in your market?

A: Bigger vehicles. SUVs are being used much more than they used to be. The Mercedes Sprinter has also been requested more, and surprisingly the Mercedes S550s in New York. I can’t tell you why but we’ve done a tremendous amount of work with that sedan.

A: In the Internet world, often the advances you make have to do with speed. The faster you accomplish everything, the more you can do. Our technology has improved drastically in terms of overall speed, and as a result our three-step booking process on Rental Limo and Book.limo is zippier than ever. The other side of improving technology focuses heavily on reliability. Up time is the technological equivalent to reliability, so redundancy is a large focus for Rental Limo to guarantee functionality and security.

Q: What generational differences do you observe and how they affect the way businesses are managed?

A: Managing a business is a difficult task. People are so different that no CEO will ever do it the same way as another. While younger operators might be more tech savvy, veteran operators might understand marketing and branding to another degree. Sometimes it’s the opposite and the vets understand the importance of the Internet more than the youngsters. In my opinion, it’s less about age and more about responsiveness and adaptation. The rule of thumb in this business is you have to spend money to make money. It’s equally important, though, to spend your money wisely. The biggest difference isn’t in age at all, but rather attitude.

Q: What are the most important things limo companies can do to stay competitive with TNCs such as Uber and Lyft?

A: Realize that the superior chauffeured transportation your company provides separates you from them. TNCs are disguised as taxis. The writing is on the wall. It began as UberCab before they were essentially forced to change their attack plan, and they used our industry to dodge the cabbies. These companies are mainly concerned with using state-of-the-art technology to get people from point A to B for as cheap as possible. My advice is to embrace technology to stay competitive.

A: Driver communication and data logging are new changes we made this year. With the new apps we can monitor the status of the driver and passenger at any time. The app also can allow the drivers to receive, maintain, and log times, which has cut down on our dispatch and accounting processes.

Q: What is your biggest cost of doing business and how do you minimize it?

A: Insurance is our biggest cost and we shop around for the best actual cost and maintain a higher deductible. We make sure our drivers are well trained so we do not have losses. We are never going to be without the expense of vehicle financing, so we look for the best vehicle at the best price and negotiate financing.

Q: What is a noticeable trend in your market?

A: Certainly last minute bookings for airport service, weddings, and corporate groups. Corporate groups that are traveling to our Florida destinations are still budget conscious and focused more on education, and come in and out within two to three days. We are seeing groups use our service just for airport transportation to and from the hotel, and they have eliminated off property functions altogether. Weddings transportation is being booked later because they’re being based on budget. If you have a wedding lead, then it may be vital to follow-up closer to the wedding date as timing can make all the difference.

Q: What are the most important things limo companies can do to stay competitive with TNCs such as Uber and Lyft?

A: Easy, provide good old-fashioned customer service. Be the local company customers want to do business with — ask questions of the passengers and really listen to what they are saying and push every boundary of your service to go one step further. As much as we are a society that depends on technology, we hear quite often from customers that they want to patronize local small businesses.

Q: What generational differences do you observe and how they affect the way businesses are managed?

A: I think in years gone by there were more observable differences. Now, between advancements in technology, social media platforms, and business-building tools, in a way the playing field has been leveled. Young or old, you need to embrace these tools to make yourself competitive or you can say goodbye to profitability. Older operators have the advantage of having watched the industry evolve, which puts experience on their side and gives them reason to pause, whereas younger operators are often more willing to take on risk and push boundaries. With soaring operating costs and tighter margins of profitability, neither demographic can simply throw caution to the wind when managing their businesses. All decisions need to be calculated and deliver a tangible ROI.

Q: What vehicle brands or models do you think have potential for growth in the industry?

A: The Tesla vehicles have caught our eye and I believe they may provide a new avenue for growth. We will continue to evaluate its performance and industry feedback as we begin strategically planning for our next lifecycle of fleet vehicles.

Q: What are the most important things limo companies can do to stay competitive with TNCs such as Uber and Lyft?

A: The gentlest way I can put it is to “accommodate for change and keep moving forward.” Some operators become paralyzed by the idea they may have to adapt to survive in this post-TNC world. An irrational fear comes over them and suddenly they feel they might have to reinvent themselves and their tried-and-true business models. In most cases, this isn’t true. Operators should learn to shop and study their competition, including TNCs and assimilate what is relevant and discard what is not to evolve into a viable option for consumers of today and tomorrow. By stepping out of our comfort zones and our shells, we gain firsthand perspective. The truth is that TNCs have introduced the next generation of technology that has, undoubtedly, changed our industry coupled with a strong mixture of “below and above” line marketing. Those two things alone should give the operator a good starting point.

Q: As a younger operator, what generational differences do you observe and how they affect the way businesses are managed?

A: I would have to say ambition as opposed to wisdom. Millennials are particularly ambitious and we aren’t afraid to own that. No matter how much we fall flat on our faces, we keep moving forward and embody the drive that an operator wants in an employee for the long term. On the other hand, Generation X and Baby Boomers hold the one thing we need to temper ambition into consistent success, and that’s the wisdom that comes from experience. The common factors that can unite every one of those generations are humility, empathy, and the ability to recognize the value of each other’s cumulative life experiences as a single collective unit. If you can harness those skills, you can overcome any challenge.

Q: What are some technological advances you’ve made at your company?

A: We are bringing online a new system that will allow us to go 100% paperless while giving dispatchers and reservationists the ability to help manage the chauffeur’s workflow by using an intuitive system with set parameters to guide them. Chauffeurs will be able to use a tablet to display their locations to dispatchers, reservationists, and the clients via a mobile app, and the app program will interface with any terminal at the base. Clients also will be able to see the driver’s location and picture, just like those used by TNCs. The tablets also will act as two-way radios connecting the base to the chauffeur.

A: We find that brides and grooms who used to book a one-of-a-kind vintage Rolls Royce two years in advance are now calling for their wedding next week. That’s a direct reflection on how easy information can be obtained. Google has changed the planet and it’s causing a culture shift along the lines of “Google it, and you’ll find something for next week.” What that is doing to our business, though, is making it difficult to invest in our fleets because now business is much more difficult to forecast.

Q: What vehicle brands or models do you think have potential for growth in the industry?

A: I’m curious to see how Mercedes’ interest in our industry plays. We all seem to be buying a significant amount of Sprinters as well as E and S Class sedans, and it would be nice to see Mercedes invest in our industry. I believe that Cadillac, Chrysler and Ford/Lincoln brands could be doing more for the chauffeured transportation industry, especially in their service departments.

Q: What topics would you liked to see talked about among the LCT Fast40?

A: We just celebrated 11 years in business, with 18 vehicles in the fleet, and hovering right around the $2 million sales mark. In the past couple of weeks, I have become aware of the fact that every mistake that could be made in business, we made. Some of those failures and mistakes could have probably been averted had I heard it from a group of my peers.